NHS providers register £648m half-year deficit

21 Nov 16

NHS providers recorded a deficit of £648m in the first six months of the financial year, almost £1bn lower than in the same period last year, according to figures from NHS Improvement.

The health service’s financial watchdog said the figures released last Friday showed the first half of the year had seen a financial recovery across the health service, despite the deficit being around £22m worse than planned.

As well as the reduction from the £1.6bn deficit in the first half of 2015-16, the number of trusts reporting an overspend was 142, 40 lower than the same time last year. Providers made £1.2bn of savings through cost improvement programmes, reducing total year-to-date expenditure by 2.9%.

The watchdog stated the deficit could be brought down to £580m if providers met their savings targets in full over the remaining half of the year. However. This would still be above the £250m deficit target set when NHSI and other national bodies staged a reset of the health service finances in July.

NHSI chief executive Jim Mackey stated no-one should underestimate the challenge of turning around a very difficult financial position, following the £2.45bn whole year deficit for 2015-16.

However, he said that the figures amounted to being “one-nil up at half time”.

He added: “We can’t allow ourselves to be complacent. We know that we’ve got a lot of hard work still to do, and we’ll need each and every person within the NHS to play their part. We owe it to the people who use and fund our services to provide the best quality care possible within budget.”

According to the figures published on Friday, measures to curb excessive agency spend are also having a real impact. Two thirds of NHS providers say controls on agency spending levels, have enabled them to save money, with total costs set to fall by around £900m this year.

However, the review also highlighted that some trusts and some specialities, such as radiography, were failing to pull their weight, and has set out plans to publish league tables and called for finance directors to take a greater role in the cost-cutting drive.

Responding to the figures, King’s Fund director of policy Richard Murray said the figures were “another reminder of the huge financial and operational pressures facing the NHS and social care”.

He added: “A year to date deficit of £648m represents good progress compared to this time last year and reflects the hard work going into tackling deficits in NHS trusts up and down the country.

“Nevertheless, with our analysis earlier this week showing widespread concerns that trusts fear they may miss their financial and efficiency targets, the second half of the year is likely to prove more challenging than the first.”

Paul Briddock, director of policy at the Healthcare Financial Management Association, added that these figures were positive.

“Hopefully, this marks the start of a gradually improving picture for provider finances and is testament to the incredibly hard working staff in the NHS,” he added. “However, the battle to balance the NHS’ books is far from over – there is still an incredibly ambitious target for this year as a whole to achieve the forecast deficit for the year of £580m, a goal which will be difficult to meet given the relentless demand on the NHS.”

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